Arbitration Law in India: Things you should know
Arbitration is currently at a stage great development in India, with technology being more and more used in India since the early 2000s. The country has the ambition to become an international hub for arbitration.
In this article, we will have a look at the law governing arbitration in India, the current situation and effectiveness of arbitration in India and finally the future of arbitration in India.
The law governing arbitration in India
In India, the law concerning arbitration has been influenced by the English Common Law. Arbitration in India is regulated by the Arbitration and Conciliation Act 1996, which has been developed following the models of the 1985 UNCITRAL Model on International Commercial Arbitration and the UNCITRAL Arbitration Rules of 1976.
This arbitration act distinguishes two types of arbitration: Ad hoc arbitration and Institutional arbitration.
Ad hoc Arbitration implies that the conduct of arbitration follows the rules agreed between the parties.
Institutional Arbitration is the situation in which the arbitration is ruled by the rules of the procedure of an institution, for instance, a tribunal. The arbitration act requires the arbitration agreement to respect a number of mandatory rules. The arbitration agreement must necessarily indicate the litigations that will be held in courts by arbitrators, a mandatory to initiate and conclude the arbitration proceedings and the possibility for the parties to challenge the arbitral awards.
The disputes that can be governed by arbitration and the current situation of arbitration in India
Indian institutions are generally currently not so effective. According to World Bank Report 2019, India ranks 77 out of 190 in Ease of Doing business, ranks 163 in enforcing contracts and it takes an average of 1445 days to resolve commercial disputes in India in courts. In such context, the country has to develop a comprehensive, effective and result-oriented arbitration system and improve its traditional court system.
With 35 Arbitral Institutions in India for domestic, international, trade and merchant associations, and e-City-specific chambers of commerce and industry, India does not allow every litigation to be resolved by arbitration. In India, the following matters, among others, can be resolved by arbitration: criminal offences, matrimonial disputes, guardianship matters, trust litigations…
The future of arbitration in India
India undertook ambitious transformations of its arbitration system. For instance, the arbitration act has been amended so that challenging arbitral awards is not automatic anymore, which will necessarily improve the efficiency of arbitration proceedings, and make it actually cost-effective. This amendment has been passed in order to improve its quality in arbitral proceedings, India has to lessen the court interventions regarding arbitral awards, and improves the trust institutions of the country have regarding the arbitral awards.
Moreover, since the early 2000s, India has been trying to implement technology as a norm in arbitration proceedings, with the Covid pandemics being a catalyst of such ambition. To be precise, India has always authorized arbitration proceedings to be conducted by any means necessary, with Section 19 of the Arbitration & Conciliation Act stating that “The parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings”. The Indian Council of Arbitration (ICA) urges that the arbitral institutions should conduct arbitration proceedings by any means of communication necessary, including videoconference and especially during the context of Covid and lockdowns.
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ABOUT THE AUTHOR
I am a Lawyer and Partner of one of the leading Law firms in Dubai, UAE. I have years of expertise in dealing with many complex cases, in practice areas such as mainly in Corporate Law, Commercial Law, Finance Law, Criminal Law, Family & Divorce Law, Arbitration, Dispute resolution and Debt recovery